WHAT happens when a will leaves behind more liabilities than assets? wealth explores.

My father had a cardiac arrest, in the middle of an MRI scan, and expired. He did not hold any property or investments but had some significant credit card dues.

I have two questions:
1. Are any of his immediate family members liable to clear his card dues?
2. He had a personal accident insurance cover on all his credit cards. Can I make an insurance claim since the death occurred during an MRI scan?

-- Raghu

When a person passes away, his debts are ideally cleared from the investments and property that he leaves behind. Investments include bank deposits, vehicles, shares, mutual funds etc. Property includes land, house, business etc.

The remaining portion (if any) is handed over to the heirs. Heirs includes spouse and children, unless there is a will that names somebody else. The heirs do no have to pay any dues that are not covered by the value of the investments and property.

In Raghu's case:
1. If his father had a joint credit card with either him or his siblings (if any), then the joint holder is responsible for the payment on credit cards.

2. If there is no joint holding of the credit card and no other property or money, Raghu simply needs to submit the death certificate along with a written confirmation to the credit card company that his father did not own any property or assets. He will not be liable to pay the dues of his father.

Insurance claim may not be possible
Death due to cardiac arrest during an MRI scan is unlikely to qualify for the accident cover. However, he can go through the policy in detail to check if there is an insurance rider that provides additional coverage for any illness that is not covered in the primary policy.

Also read: Too broke to pay back your loan?

Photograph: Peter Macdiarmid/Getty Images

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e-mail: Gurjap Singh Kohli

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